Apple Considers Buying AI Startup Perplexity: Report

Apple is reportedly exploring a potential acquisition of Aravind Srinivas-cofounded Perplexity AI to boost its artificial intelligence capabilities.

A Bloomberg report, citing people close to the matter, said that Apple executives have held internal talks about potentially bidding for Perplexity AI. Discussions remain at an early stage and the company has not engaged directly with Perplexity’s executives.

Adrian Perica, Apple’s head of mergers and acquisitions, reportedly discussed the potential of integrating Perplexity’s AI-driven search tools with Apple’s services chief Eddy Cue and other AI leaders.

However, Perplexity said that it has no knowledge of any current or future M&A discussions involving the startup.

Meanwhile, Apple did not respond to Bloomberg’s queries. 

If the Apple’s buyout deal of Perplexity materialises, it would be one of its biggest acquisitions after Beat, which was bought for $3 Bn in 2014. 

Perplexity was valued at $14 Bn in its last funding round. 

With this acquisition, Apple plans to integrate Perplexity’s AI search engine with its web browser Safari. 

Founded in 2022 by Srinivas, Denis Yarats, Johnny Ho and Andy Konwinski, Perplexity is an AI-powered search engine that helps users to answer various queries from various web sources. Unlike traditional search engines, Perplexity allows users to ask follow up questions and give a conversational experience. 

The development comes a couple of months after Cue reportedly testified that Google searches within Safari have declined for the first time in over two decades. He attributed this decline to the rise of AI-powered search alternatives like ChatGPT and Perplexity. Back then, Apple said that it was mulling on integrating an AI-powered search engine into Safari. 

For context, Apple has signed a $20 Bn annual deal with Google, making the latter its default search engine for its web browser.

Apple’s acquisition of Perplexity AI will cast uncertainty on Google’s arrangement with the big tech company. If this annual deal breaks, it will be the beginning of Google losing its grip in the global search engine market. 

A CNBC report said that Meta also tried to buy Perplexity to enhance its AI capabilities to take on the likes of OpenAI and Alphabet in the race to dominate the space. 

But eventually Meta’s acquisition talks with Perplexity did not materialise and went on to invest $14.3 Bn in Scale AI to buy 49% stakes in the company. 

Perplexity AI’s India Playbook 

After Srinivas met Prime Minister Narendra Modi last year in New Delhi to discuss the adoption of AI in the country, the AI startup struck a deal with Paytm to integrate its AI-powered engine capabilities with the fintech’s app. The integration will help Paytm users to use the AI-led search bar to ask queries on financial decisions. 

Earlier this year, Srinivas also made the subscription of its Perplexity AI Pro version free for the students and faculty of his alma mater IIT Madras in a bid to promote the adoption of AI in the country. 

In January Srinivas also vouched for the idea of India building its own foundational model instead of fine tuning existing open source AI models and building its own muscle in the AI space. 

“… I hope India changes its stance from wanting to reuse models from open-source and instead trying to build muscle to train their models that are not just good for Indic languages but are globally competitive on all benchmarks…,” Srinivas wrote in a post on X.